Credit Managers’ Index Bounces Back
Thursday, April 27, 2017
The Credit Managers’ Index (CMI) from the National Association of Credit Management (NACM) eased upward in April, following a slight decline in March. The overall index stands at 55.8, compared to 54.3 last month. The index of favorable factors bounced back to 63.6 in April, exactly where it stood before dropping to 60.6 in March. The index of unfavorable factors increased slightly again this month from 50.2 to 50.6.
“The month showed a significant improvement over the previous month as most of the numbers seemed to rebound to levels seen in February and near the high level for the last few years,” said NACM Economist Chris Kuehl, Ph.D. “Thus far, the enthusiasm regarding economic growth remains intact and suggests that confidence levels may be pulling the economy along as opposed to the usual pattern.”
As usual, the interesting information lies in the specific subcategories. Sales data rose from 61.2 to 63.8, its highest level in years. The amount of credit extended also jumped from 64.4 to 67.2. The dollar collections category showed noteworthy movement, jumping from 56.4 to 61.2 following a significant decline in March.
Unfavorable factors weren’t quite as upbeat. Minor improvements came from rejections of credit applications, which continued to rise, going from 51.6 to 52.1. This movement indicates that those seeking credit are generally creditworthy. The accounts placed for collection declined slightly from 49.8 to 49. The disputes reading remains in contraction, increasing slightly from 48.5 to 49.1. The dollar amount beyond terms recovered from last month’s slump, returning to its previous reading of 51 from 47.4. The dollar amount of customer deductions slipped from 49.8 to 49.2. Filings for bankruptcies moved down slightly from 53.8 to 53.5.
“Overall there was a gain this month, and the dip in March seems to have been reversed,” Kuehl said. “The big gains were in manufacturing, and the service sector more or less held steady on the strength of the favorable factors despite continued weakness in the unfavorable.”
View the complete report and analysis from NACM.
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